Tuesday March 30, 2010 - 03:42:55 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 30-Mar-2010 - 0341 GMT
The Dow (10895.86) rose nearly half a percent yesterday on better economic data which showed the spending grew for the fifth straight month. Besides, Geithner's healthy assessment of the economy also carried the markets higher. The Resistance near 11000-11100 on the Dow will be closely watched.
The Asian markets are trading higher today except Shanghai (3121.26) which is trading flat. The Nikkei (11038.08) and Hang Seng (21360.61) are up half a percent each. The Sensex (17711.35) had closed at a 2Y high yesterday. The Resistance near 18000-18200 may be tested this week.
Crude (82.15) has risen sharply and closed above 82 yesterday. The Weaker dollar supported the price rise. A strong break above 82.50 might test the previous high of 83.95 (11-Jan-10). On the downside, Support is seen at 80.
Gold (1108.90) is continuing to trade above 1100. Though the weaker dollar Supported the price, much momentum is not seen in its upmove above 1100. Resistance is seen at 1120-25 region which might retain the downside pressure for sometime.
Most of the currencies stabilised a bit in the US session yesterday and are relatively stable in the Asian session today, after having strengthened against the Dollar on Friday and earlier in the day yesterday. Confidence in the global economy is inching up, with yesterday's US Personal Income and Consumer Expenditure data coming in good, leading to a rise in stocks and commodities. What the currency market is debating is which currency to buy. Should the Dollar be bought on good US numbers, or should the non-Dollar currencies be bought on good US numbers. Here it is important to recognise that this debate now exists, in contrast with last year, when good US numbers were a trigger for Dollar sales, and bad US numbers, paradoxically, were a trigger for Dollar purchases.
The market is currently trading as follows:
Euro near 1.3480, remaining below 1.35 so far. Dollar-Yen near 92.35, a little lower than yesterday's high near 92.78. The Euro-Yen (124.45) has come off a bit after testing range resistance at 125.05 yesterday, but might find buyers on dips. Dollar-Swiss (1.0630) is trading lower, but has Support at 1.0550. The Pound (1.4980) has moved up decently well from the low near 1.4799 on Friday and might see a further rally today. The Aussie (0.9175) is maintaining the strong recovery yesterday from Friday's low near 0.9000 and might rally further towards 0.9240.
In Asia, the Sing Dollar (1.3985) strengthened to 1.3975 today, from Thursday's high near 1.4077 in the USD-SGD. Dollar-Won trades lower near 1130.80, down from levels near 1140 last week. Dollar-Rupee fell to a low near 44.96 yesterdy and closed near about there only. There can be room for a further dip towards 44.80 and 44.60 over the course of the week.
3M USD LIBOR was unchanged at 0.29%. The US Treasury yields rose to the highest since June on a healthy assessment of the economy by Geithner. He observed that the job market would start improving soon and the financial system is also improving. The 2Y and 10Y yield was quoted near 1.03% and 3.86% respectively.
The US Treasury Department is looking to unwind its investments under $700 bln TARP and will sell its stake in Citibank over 2010.
...Actual 4.9%...Previous 4.9%
08:30 GMT UK GDP Q4 '09 (Fnl)
...Expected 0.3%...Previous 0.3%
13:00 GMT US Case Schiller
...Expected -0.5%...Previous -3.1%
14:00 GMT US Cons Conf
...Expected 50.2...Previous 46.0
US Feb Personal Income
...Actual 0.0%...Previous 0.3%
US Feb PCE Price Index M/M
...Actual 0.0%...Previous 0.0%
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